Senate OKs fuel tax increases

Senate and House must negotiate differences, but an increase in gas tax is certain

Apr. 19, 2013

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Free Press Staff Writer

MONTPELIER — Five Senators, troubled, they said, by who would be burdened by an increase in the taxes on gasoline and diesel, voted against a $632 million transportation project bill Friday.

“I know we need to keep up our roads,” Sen. Ann Cummings, D-Washington, said, but noted she couldn’t support increasing the taxes “on a necessity of life.”

A majority of the Senate — 23 — supported the transportation package that includes a 4 percent assessment on the wholesale price of gasoline coupled with a decrease in the tax per gallon for a net increase of 5.9 cents beginning May 1. The bill also calls for diesel to increase in two steps, two cents per gallon on July 1 and another two cents on July 1, 2014.

The House also passed an increase in the gasoline tax, but not the diesel.

Senate Transportation Chairman Richard Mazza, D-Chittenden/Grand Isle, acknowledged his own reluctance to raise fuel taxes, but explained that fuel revenues wouldn’t be sufficient to meet transportation needs because “Vermonters are driving fewer miles and vehicles are getting better mileage.”

The transportation fund is supplied by gasoline and diesel taxes, most, but not all of the motor vehicle purchase and use revenues and motor vehicle fees. A portion of the motor vehicle purchase and use tax goes to the Education Fund.

Mazza said the gap between projected revenues and spending for next year was $36.5 million. “There was no way to close the gap without raising revenue or sending money back to the federal government.”

“The state can’t afford to leave $56 million on the table at this time,” he said, referring to federal dollars the state wouldn’t be able to tap without raising more state funds. The state has been chipping away at a backlog of maintenance and reconstruction on its highways and bridges and federal dollars cover 80 to 90 percent of the cost of those projects.

Mazza admitted that the proposed tax increases are only a short-term remedy to a chronic problem that every state is facing. Gasoline taxes paid by the gallon are declining because of changed driving habits and increased vehicle efficiency. He predicted, “These increases are only a three-to-five year solution to the funding gap.”

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Cummings had hoped to register her opposition to the fuel tax increases in a separate vote and then support the bill, but that didn’t work out. She proposed, but withdrew an amendment that would have deleted the tax sections of the bill. She changed her mind after Senate Transportation Vice Chairman Richard Westman, R-Cambridge, suggested that spending cuts — if the extra tax dollars weren’t raised — could include the state’s snowplowing account or some of the $50 million earmarked to help towns pay for roadwork.

Sen. Jane Kitchel, D-Caledonia, noted that the Senate Transportation Committee’s bill would raise less in taxes than either the House or the Shumlin administration plans and that the Senate panel had pared spending in several categories, including maintenance.

Sen. Robert Starr, D-Essex/Orleans, objected to raising all the new revenue from highway users, rather than asking rail users, public transit riders and the aviation sector to “put some dimes on the table.”

He noted, for example, the increase in the size of the subsidy the state will pay to maintain passenger train service in Vermont – a jump of $3.1 million to a new annual levy of $7.6 million.

“You are subsidizing every single person that rides that train by $50 a ticket,” Starr suggested. Noting that drivers on highways weren’t getting any break, he asked, “Is it really fair?”

Kitchel reminded senators that the bill directs the Agency of Transportation to work with other states that Vermont’s passenger lines pass through to increase fares to offset at least 20 percent of the subsidy increase.

The Senate suspended its rules and compressed its debate and votes on the transportation bill to a single day in order to speed the measure back to the House. The bill has to be on a fast track if lawmakers want the gasoline tax increase to take effect on May 1.

The House and Senate versions of the bill are different, but House Transportation Chairman Patrick Brennan, R-Colchester, predicted a quick resolution. “We have a few minor differences that I think we can work out.”